THE SOUTHLAND FIRES : Insurer of Last Resort Faces the Brunt of Losses : Fires: California Fair Plan was hit hard by Altadena blaze, but bulk of its policyholders are in the Santa Monica Mountains.

The California Fair Plan, an industry-sponsored insurer of last resort for homes in areas prone to brush fires, suffered a disproportionate share of the losses in the Altadena fire of last week and could be hit hard again by the fires sweeping Tuesday through the canyons of Calabasas and Malibu.

Many fire victims with Fair Plan policies may lack the coverage to fully restore what they lost. More than four-fifths of the program’s policyholders have only “actual cash value” coverage, which pays depreciated value for the structure and possessions, rather than full replacement cost.

After depreciation, fair market value can be significantly lower than replacement cost.

The Fair Plan so far has set aside reserves of $27 million against expected losses in the Altadena area, spokesman Mike Harris said Tuesday. More than 205 claims had been filed as of late Tuesday, 74 of them involving homes destroyed, he said.

The Fair Plan, which also provides coverage for hard-to-insure businesses in urban areas, insures 3,443 homes in the San Gabriel Mountains, Harris said. But in the Santa Monica Mountains, where fire was raging Tuesday, Fair Plan exposure is far greater: 18,170 homes, or nearly 70% of all the homes the program covers in California brush-fire zones.

In January, the Fair Plan for the first time began offering replacement cost coverage, but only 18% of the program’s homeowners insurance customers have signed up for it, Harris said.

The cost per unit of coverage is about the same for replacement value coverage and cash value coverage, Harris said. However, many homeowners pay more for replacement value coverage because the premium is based on the full value of the house.

In many cases, homeowners with actual cash value coverage who have not updated their policies in years may have coverage limits substantially below the current value of the house.

While the bulk of the Fair Plan losses in last week’s fires have been concentrated in Altadena, it is becoming clear that the Laguna Beach fires were far more costly. Two of California’s three largest insurers, State Farm and Farmers Group, also released preliminary claims totals on Tuesday for those fires. Insurers had no idea of the extent of their losses from the new fires that broke out Tuesday.

Farmers said its payouts will reach $58 million from claims filed so far. The company had about 640 claims as of late Tuesday, with most involving wind damage, but 180 for smoke and partial fire damage and 95 for homes destroyed--92 of them in Laguna Beach.

State Farm could provide no dollar estimate, but a spokesman said 588 claims had been filed, 129 of them for homes rendered “uninhabitable.” Of those, 30 were in the Altadena area and nearly all of the rest were in Laguna Beach.

State Farm has about 25% of the California market and Farmers has about 13%.